Burry Moves AI Stock Shorts Into Puts, Says Bubble May Burst Sooner

Michael Burry, the investor known for shorting the U.S. housing market before the 2007-2009 financial crisis, said he is accelerating the timeline for his bearish bets on AI-related stocks. In an investment newsletter on Sept. 28, Burry said he is converting short positions in Micron, Nebius, the iShares SOXX Semiconductor ETF and Palantir into put options to gain more cost-effective leverage over a shorter time frame.

Burry wrote that he is moving up his time table and wants more leverage on the short positions. He described the puts as relatively cheap because volatility indicators such as the VIX are unusually tight. Some of the moves were aimed at reducing tax obligations, but he said the larger reason is his belief that the AI bubble could burst sooner than expected. The shift suggests the AI trade could reverse before summer 2027.

On the specific positions, Burry replaced his Micron short with puts expiring June 2027 with strikes in the $500 range, moved his Nebius short into puts expiring June 2027 with double-digit strikes, shifted his SOXX short into puts expiring September 2027 with strikes just above $400, and rolled his Palantir short and put positions into a larger put position expiring September 2027 with strikes just above $100.

Burry cited Ares Management research warning that AI relies on unproven revenue and is structured by demanding legal agreements, and that one disappointing quarter of AI revenue could disappoint expectations underwriting capital spending. Earlier in September, he had added to shorts in Micron, Nebius and SOXX. While the Nasdaq Composite closed at a record high in the week ending Sept. 25, Micron was about 16% below its record and Palantir about 10% below its all-time high.